(CNSNews.com) – U.S. concerns have escalated in recent years over Hezbollah and Hamas’ fundraising activities in a key area of South America known as a corridor for arms and drug trafficking, according to a report by the Congressional Research Service (CRS).

Nevertheless, the February 2011 report pointed out that “there was no corroborated information that these or other Islamic extremist groups had an operational presence in the TBA [the “tri-border area” of Paraguay, Brazil and Argentina] or elsewhere in the hemisphere.”

The CRS has been tracking terrorism issues in Latin America’s TBA for years. In a previous report, last April, it said terrorist groups including Hamas and Hezbollah were reportedly raising funding for terrorist activities through linkages with drug trafficking organizations in South America, particularly in the TBA.

“In recent years, U.S. concerns have increased over activities of Hezbollah and the Sunni Muslim Palestinian group Hamas (Islamic Resistance Movement) in the tri-border area … which has a large Muslim population,” stated the more recent CRS report.

“The TBA has long been used for arms and drug trafficking, contraband smuggling, document and currency fraud, money laundering, and the manufacture and movement of pirated goods.”

The State Department says the U.S. continues to be “concerned that sympathizers of Hezbollah and the Sunni Muslim Palestinian group Hamas are raising funds” in South America, according to the report.

“The State Department terrorism report maintains that the United States remains concerned that Hezbollah and Hamas were participating in illicit activities and soliciting donations from sympathizers in the sizable Middle Eastern communities in the region.”

During a January 2011 House Foreign Affairs Committee hearing, Rep. Ted Deutch (D-Fla.) raised concern about links between the import of Chinese-origin counterfeit goods into the TBA and the raising of “millions of dollars in direct contributions” to Hezbollah.

“One such specially designated global terrorist entity in Paraguay provided a lump-sum payment of $3.5 million to Hezbollah,” added the congressman.

Deutch was referring to Assad Ahmad Barakat, who was labeled a specially designated global terrorist in 2004 for his support for Hezbollah through criminal activities ranging from counterfeiting to extortion.

Hezbollah has strong links to Iran, which faces sanctions for its nuclear activities and has been making inroads in Latin America in recent years.

The CRS report said, “Concerns about Iran’s increasing activities in Latin America center on Iran’s attempts to circumvent U.N. and U.S. sanctions, as well as on its ties to the radical Lebanon-based Islamic group Hezbollah.”

“Allegations have linked Hezbollah to two bombings in Argentina: the 1992 bombing of the Israeli Embassy in Buenos Aires that killed 30 people and the 1994 bombing of the Argentine-Israeli Mutual Association (AMIA) in Buenos Aires that killed 85 people,” it said.

A report on Texas’ homeland security strategic plan for 2010-2015, signed by Republican Gov. Rick Perry, refers to a Hezbollah operational presence in U.S. cities, including major metropolitan areas in Texas.

“There are also numerous reports that Hezbollah has a growing relationship with Mexican cartels and uses drug and human smuggling routes into and through Texas to facilitate the full range of its activities,” it said.

Hezbollah is a Lebanese-based terrorist organization with links to Iran and Syria. It was formed in 1982, with Tehran’s assistance, by Lebanese Shi’ite clerics who supported Iran’s Islamic revolution.

Before al-Qaeda attacked the U.S. in 2001, Hezbollah was responsble for killing more Americans in terror attacks than any other group. Its 1983 bombings of the U.S. Embassy and the U.S. Marine barracks in Beirut cost almost 300 lives.

Hamas is the Palestinian offshoot of Egypt’s Muslim Brotherhood. Dedicated to the eradication of Israel, the group has controlled the Gaza Strip since seizing power from the Fatah-dominated Palestian Authority.

Both Hamas and Hezbollah are designated as foreign terrorist organizations by the U.S. government.